Pitfalls for a Dentist to Avoid in Employer-Employee Relationships

Avoid written office policies and employee
manuals.  This may seem
counter-intuitive, but we generally discourage clients from providing employees
with written office policies or employee manuals. The problem is that employers
may unwittingly deviate from the procedures specified in these documents.
Especially when matters like compensation and termination of staff are
involved, such deviations can lead to lawsuits, with your own employee manual
as a primary exhibit.

Require employment agreements with restrictive
covenants.  We strongly urge
employers to have their professional and administrative staff sign employment
agreements that include an adequate and enforceable restrictive covenant. Without
these covenants in place, a dental practice may face unfair competition from a current
or former employee whose activities were not properly limited for the benefit
of the employer. For example, an employee could leave the practice and attempt
to hire one of your other employees, market to your patients, or make off with
office records.

Provide required post-termination
compensation.  If an employee’s compensation
includes a percentage of his or her collections, then as a matter of law, the
employee may continue to receive such compensation after leaving the practice.
Although the employee would no longer receive any base pay, he or she should
still receive the percentage of collections attributable to his or her work.
Employers who fail to provide such post-termination compensation may be subject
to treble (“triple”) damages.

Be cautious about “independent contractors.”  Employers should be extremely cautious when
attempting to hire someone as an independent contractor. Simply calling the
individual an independent contract will not be enough; the IRS may conduct an
investigation to determine whether the classification is appropriate. If the
IRS concludes that the individual is not an independent contractor but an
employee, the employer may be found liable for any deficiency in withholding
taxes and the accrued interest and may be subject to stiff penalties. Before classifying
a new hire as an independent contractor, the employer is strongly advised to seek
the advice of an attorney or CPA to avoid running afoul of IRS rules and
regulations.

Avoid common-sense problems.  Avoiding some pitfalls in the
employer-employee relationship should be a matter of common sense. The following
problems, however, occur often enough to make them worth mentioning:
i.
Intimate relationships in the workplace.
Employers should discourage their staff members from engaging in intimate
relationships with other employees, especially between supervisors and subordinates.
ii.
Cash payments to staff. Providing staffers
with cash payments for compensation, reimbursement, etc., should be avoided. Issuing
checks instead ensures a traceable paper trail in case a problem arises later.
iii.
Inconsistent treatment of staff. All
staff should be treated with the same degree of professional courtesy and
respect.
iv.
Denying overtime pay.  Be sure to follow state law requirements for
overtime pay, which may include certain exceptions.
v.
Discriminatory practices.  Decisions about matters like terminating an
employee, providing bonuses, or giving promotions should not be based on
characteristics such as age, gender, disability, religion, race, sexual
orientation, etc.

Retain specialized professional advisers.  Before retaining an attorney, CPA, or other professional,
look for someone who has extensive experience serving dental practices and
whose client base is made up largely of dental practitioners. This experience and
familiarity will be an essential benefit as you navigate the legal and
professional intricacies that distinguish dentistry from other enterprises.